Jagdish Sahai, J.:— In these two writ petitions common submissions have been made. We are, therefore, disposing them of by a common judgement. The petitioners in Civil Misc. Writ No. 901 of 1967 are the Firozabad Glass and Chemical Industries Ltd. and Sri Shrigopal Chandra, while in Civil Misc. Writ No. 902 of 1967 the petitioners are Firm Madan Mohan Damma Mal and Sri Shrigopal Chandra. In Civil Misc. Writ No. 901 of 1967 there are five respondents while in Civil Misc. Writ No. 902 of 1967 there are nine respondents. Respondents Nos. 1 to 5 in both the writ petitions are common. At the material time the petitioners were carrying on business in the town of Firozabad in the district of Agra.
2. By means of these writ petitions a larger number of orders are sought to be quashed. It is not necessary to mention all those documents. The main relief sought by the petitioners in the two writ petitions is that the assessment orders made against them for the assessment year 1962–63 be quashed.
3. The assessment orders have been passed by Shri K.P Jain, Income-Tax Officer, Central Circle I, Meerut. Normally the assessment proceedings giving rise to these petitions should have taken place at Agra, but the Central Board of Direct Taxes, New Delhi, transferred the cases to Meerut. Later on, at the request of the petitioners, Shri Jain aforesaid was directed to hold the assessment proceedings of the petitioners at New Delhi.
4. A large number of grounds have been taken in the two writ petitions. Most of those grounds can be urged before the Appellate Assistant Commissioner before whom appeals are pending against the assessment orders passed by Sri K.P Jain.
5. Mr. Deoki Nandan has, however, contended that there are two questions which cannot be raised Before the Appellate Assistant Commissioner and for the decision of those questions the proper forum is this court exercising its powers under article 226 of the Constitution of India.
6. The two questions are:
“1. That the transfer order having been passed by one member of the Central Board of Direct Taxes and not by the entire Board, the order was invalid and in any case the said order is bad as it does not record the reasons on which the order is based.
2. That the petitioners did not have a reasonable opportunity of producing their evidence before Shri K.P Jain with the result that there has been violation of principles of natural justice as also of the provisions of section 143(3) of the Income-Act, 1961 (hereinafter referred to as the Act).”
7. We proceed to consider the submissions seriatim.
8. The power to transfer a case from one Income-Tax Officer to another is contained in section 127 of the Act. That provision, so far as is relevant for our purposes, reads:
“127. Transfer of cases from one Income-Tax Officer to another.— (1) The Commissioner may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one Income-Tax Officer subordinate to him to another also subordinate to him, and the Board may similarly transfer any case from one Income-Tax Officer to another.”
9. Section 2(12) of the Act defines Board and reads:
“2.(12) ‘Board’ means the Central Board of Direct Taxes constituted under the Central Boards of Revenue Act, 1963.”
10. Clearly, the Act does not provide as to how the Central Board of Direct Taxes would function. The Act only provides that the Board (Central Board of Direct Taxes) can transfer a case from one Income-Tax Officer to another Income-Tax Officer but there is nothing in the Act which regulates it internal management or deals with the manner of functioning of the Central Board of Direct Taxes. That Act is also silent on the question as to whether the Board has to function as a body or its individual members can act for the Board.
11. The sole purpose and the main function of the Act being to consolidate and amend the law relating to Income-Tax and super-tax, matters relating to the distribution of business amongst the members of the Board and its functioning were clearly beyond the scope of the Act.
12. The provisions relating to the internal management of the Central Board of Direct Taxes and how it would function are contained in the Central Boards of Revenue Act of 1963. The preamble of that Act reads:
“An Act to provide for the constitution of separate Boards of Revenue for Direct Taxes and for Excise and Customs and to amend certain enactments for the purpose of conferring powers and imposing duties on the said Boards.”
13. Section 4 of this Act provides:
“4. Procedure of the Board.— (1) The Central Government may make rules for the purpose of regulating the transaction of business by each Board and every order made or act done in accordance with such rules shall be deemed to be the order or act, as the case may be, of the Board.
(2) Every rule made under this section shall be laid as soon as may be after it is made before each House of Parliament while it is in session for a total period of thirty days which may be comprised in one session or in two successive sessions, and if, before the expiry of the session in which it is so laid or the session immediately following, both houses agree in making any modification in the rule or both houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be, so however, that any modification or annulment shall be without prejudice to the validity of anything previously done under that rule.”
14. Purporting to act under this provision the Central Government framed rules called the Central Board of Direct Taxes (Regulation of Transaction of Business) Rules, 1964. These rules were published in the Gazette of India, dated January 1, 1964.
15. Rule 4 of these Rules reads:
“The Chairman may, by an order made with the previous approval of the Central Government, distribute the business of the Board among himself and the other members and specify the cases or class of cases which shall be considered jointly by the Board.”
16. Admittedly, the Chairman has made an order distributing the business of the Board among himself and the other members as required by rule 4. It is nobody's case that before making the order relating to distribution of the business he has not obtained the approval of the Central Government.
17. In the instant case the order of transfer of the case from Agra to Meerut was passed on 16th of June, 1966, by Shri S.A.L Narain Rao, a member of the Central Board of Direct Taxes. We are told that now Shri S.A.L Narain Rao is the Chairman of that Board. A true or a certified copy of the order transferring the case has not been filed in these petitions but in annexure “X”, the letter of the Secretary of the Central Board of Direct Taxes to the petitioner, the order passed by Shri S.A.L Narain Rao has been extracted. That extract reads:
“Mr. S.G Chandra and Mr. S.K Agarwal attended. Their only objection to the transfer is that Meerut is out of way. The transfer is ordered subject to the hearing being given at a place convenient to the assessee to the extent administratively possible. The assessee will approach the Income-Tax Officer/Commissioner of Income-Tax in regard to the place where he would like to be heard.”
18. In compliance with the order extracted above the Commissioner of Income-Tax enquired from the petitioners as to at which place they would like the case to be heard and the petitioners expressly chose New Delhi. As already stated earlier the cases were heard at New Delhi and the assessments were made by Shri K.P Jain, at New Delhi.
19. The argument of Mr. Deokinandan in connection with the first submission can be split up in the following two parts:
1. That inasmuch as section 127 of the Act read with section 2(12) of the Act provided that a case can be transferred by the Central Board of Direct Taxes, it is clearly the intention of law that the Central Board of Direct Taxes must act as a single unit and a transfer order made by a single member of the Central Board of Direct Taxes is void.
2. Inasmuch as the Central Boards of Revenue Act, 1963, only permits the framing of rules dealing with the procedure and not with the transaction of business or what would in common parlance be called the constitution of Benches, rule 4 is ultra vires.
20. The two questions are interconnected. We are, therefore, proceeding to consider them together. It is true that section 127 of the Act read with section 2(12) of the Act provides that the power to transfer cases can also be exercised by the Central Board of Direct Taxes. We have already pointed out earlier that the Act does not deal with matters relating to the internal management of the Central Board of Direct Taxes nor does it deal with the manner in which the Central Board of Direct Taxes shall exercise its power. We have also pointed out that such a provision could not exist in the Act because the Act only deals with the questions relating to Income-Tax and not with the internal management or distribution of the business amongst the members of the Central Board of Direct Taxes. We have also reproduced the preamble of the Central Boards of Revenue Act, 1963, to show that that Act expressly deals with the manner in which the Central Board of Direct Taxes shall discharge its functions. Rule 4 expressly provides that the Chairman may, by an order, distribute the business of the Board among himself and the other members. It is not in dispute that Shri S.A.L Narain Rao, a member of the Central Board of Direct Taxes, had, under an order made by the Chairman, been nominated to deal with the transfer matters. The argument before us has not been that the work of transfer had not been assigned to Shri S.A.L Narain Rao but that the distribution of business made by the Chairman was illegal because it travelled beyond the scope of section 4 of the Central Boards of Revenue Act, 1963.
21. We have reproduced the provisions of section 4 of this Act. In our opinion, the words “for the purpose of regulating the transaction of business” are extremely wide and include in their ambit the power to make rules empowering the Chairman of the Central Board of Direct Taxes to pass an order distributing the business of the Board among himself and the member or the members of the Board. Mr. Deokinandan contends that the expression “for the purpose of regulating the transaction of business by the Board” should be construed to mean the power to frame rules only with regard to its routine procedure, e.g, a rule fixing the timings of the sittings of the Board, or one dealing with the form in which the applications were to be made to it.
22. We are unable to agree with the learned counsel. In our opinion, it would be narrowing the natural meaning of the words “for the purposes of regulating the transaction of business” if we confine the scope of these words only to the procedural matters, such as suggested by the learned counsel. The words used are of the widest amplitude and no reason has “been suggested why the natural meaning should be curtailed. We would also like to point out that there is nothing in the Act nor in the Central Boards of Revenue Act, 1963, which requires the Central Board of Direct Taxes to act as a single body and to perform all the functions of that Board sitting together without assigning some or all of its various duties to the individual members constituting it. Our view that the words regulating the transaction of business would also comprehend the distribution of the business to various members finds support from J.K Gas Plant Manufacturing Co. (Rampur) Ltd. v. Emperor A.I.R 1947 F.C 38, 43.. In that case an order made by a single member of the Governor-General in Council was challenged on the ground that it had not been made by the Governor-General in Council. Their Lordships, dealing with the submission, observed:
“Some attempt was then made on behalf of the appellants to suggest that on some evidence tendered to the Tribunal by the Crown before the charges were framed, it might be deduced that the distribution order was made and approved by one Member of the Council only and not by the Governor-General in Council at all and might therefore be invalid. In this connection reference was made to the rules of business made under the powers conferred on the Governor-General by sub-section (2) of section 40 which purported to authorise such action by one Member of the Council, and it was suggested that any such delegation of authority to one member only was ultra vires. It was submitted that the only rules of business which were authorised by the sub-section were rules in respect of business actually transacted by Members of the Council when in Council-assembled, emphasis being laid on the expression ‘business in his Executive-Council’, and it was contended that no order could be made except at a meeting of the Council. In our judgment there is no substance in this point. We are of opinion that in sub-section (2) the phrase ‘business in his Executive Council’ really means business of the Governor-General in Council, and that the sub-section gives authority for rules of business to be made for the more convenient transaction of such business. In the circumstances it is unnecessary for the court to consider the alleged evidence on the point.”
23. Mr. Deokinandan placed reliance upon Barium Chemicals Ltd. v. Company Law Board. In that case the following rule* made under section 642(1) read with section 10E(5) of the Indian Companies Act was challenged as being beyond the rule making power:
“3. Distribution of business.— The Chairman may, with the previous approval of the Central Government, by order in writing, distribute the business of the Board among himself and the other member or members, and specify the cases or classes of cases which shall be considered jointly by the board.”
24. Clearly this rule is in pari materia with rule 4 before us. The Supreme Court by a majority judgment upheld the validity of the rule before them. Section 10E(5) reads:
“The procedure of the Company Law Board shall be such as may be prescribed.”
25. Section 642(1) provides:
“In addition to the powers conferred by section 641, the Central Government may, by notification in the Official Gazette, make rules—
(a) for all or any of the matters which by this Act are to be, or may be, prescribed by the Central Government;….”
26. It would be noticed that the words used in sub-clause (5) of section 10E are “the procedure that provision does not even contain the words “may make rules for the purpose of regulating the business to be performed by each Board” which find place in section 4 of the Central Boards of Revenue Act. If in the name of procedure a rule could validly be made authorising the Chairman of the Company Law Board to pass an order distributing the business of the Board among himself and other member or members we do not see why the more comprehensive as also specific words used in section 4 of the Central Boards of Revenue Act, 1963, would not permit the framing of a rule authorising the Chairman to pass orders distributing the business of the Board among himself and other member or members of the Board.
27. We now proceed to consider a connected submission of Mr. Deokinandan. He contends that section 127(1) of the Act requires that the reasons for the transfer shall be recorded. His complaint is that in the order of Shri Narain Rao, extracted earlier, no reasons have been given for the transfer.
28. In the first place, we have not got the whole order of Shri Narain Rao before us but only an extract contained in a letter sent by the Secretary of the Central Board of Direct Taxes to the petitioner. Secondly, we would like to point out that in the notice issued to the petitioners to show cause why the cases be not transferred from Agra to any other place, it has been clearly stated:
“That the Central Board of Direct Taxes propose to transfer your case for facility of investigation from Income-Tax Officer, Special Circle, Agra, to the Income-Tax Officer, Central Circle I, Meerut, under section 127 of the Income-Tax Act, 1961.”
29. The reason, therefore, given in the show cause notice is “facility of investigation”. It is not Mr. Deokinandan's contention that it is not a relevant ground on which a case can be transferred. All that he contends is that the order of transfer should itself give the reasons for the transfer of the case and pointing out to the extract contained in the letter of the Secretary to the Central Board of Direct Taxes addressed to the petitioners it is contended that no reasons have been specified therein. If the show cause notice is read along with the extract of the order, the reasons for the transfer become clear. It was not necessary to specify in detail the reasons for transfer because actually when Shri S.G Chandra appeared for the petitioners before Mr. Narain Rao the objection taken by him was not that no transfer be made, but that the case should not be transferred to Meerut. This would become clear from the following passage in the order of Shri Narain Rao extracted in the aforesaid letter:
“Shri S.G Chandra and Shri S.K Agarwal attended. Their only objection to the transfer is that Meerut is out of the way.”
30. It is, therefore, not a case where reasons have not been assigned for the transfer of the case, nor is it a case where the reasons have not been disclosed to the assessee or the petitioners. The grievance of Mr. Deokinandan is not that the petitioners did not know the reasons for transfer of the cases. The complaint is that the reasons do not find place in the body of the transfer order. Apart from the objection being without substance, it is a purely technical objection. We, therefore, find no merits in the first submission of Mr. Deokinandan.
31. We now proceed to deal with the submission of Shri Deokinandan that the petitioners did not have reasonable opportunity of producing their accounts before the Income-Tax Officer, Shri Jain. We would like to state that a raid was made in the business premises of the petitioners and certain account books had been seized by the Income-Tax authorities. In respect of that matter the petitioners have filed separate writ petitions which have been partly decided against them and partly in their favour and now the matter is pending in appeal before the Appellate Bench of this court. We are not concerned with those petitions in this case. The fact had to be mentioned because Mr. Deokinandan has urged that his books have been seized by the departmental authorities and the same were not available to him with the result that he could not point out the entries in them to Shri Jain. On a question asked by us Shri Deokinandan had to answer that at no time any request was made by the petitioners for the examination or inspection of those account books, nor was any request made to Shri Jain for the production of those account books before him at the time of assessment proceedings giving rise to these petitions.
32. It is nobody's case that account books have been destroyed or stolen. Admittedly, they do exist intact and are in the custody of the officers of the Income-Tax department. Consequently, the petitioners had full opportunity to examine the same if they had so wished. They had full opportunity to have them before Shri Jain if they so chose. The petitioners had also full opportunity of using the account books before Shri Jain. That they deliberately did not do so cannot be denied. The argument of Mr. Deokinandan that the petitioners were prejudiced in the production of evidence before Shri Jain cannot, therefore, be accepted. Mr. Deokinandan also contended that certain witnesses whose appearance the petitioners wanted to procure for evidence through the Income-Tax Officer were not made available by the latter. Reliance is placed upon section 131 of the Income-Tax Act to show that the Income-Tax Officer has the power to procure the attendance of witnesses. In the assessment order the Income-Tax Officer has given the reason why he did not summon those witnesses. He rejected the request of the petitioners with regard to all the witnesses except one. The reason that he has assigned for the rejection is that their statements were not relevant for the purposes of assessment proceedings. He, however, did summon the witness whose statement he considered relevant, but the petitioners did not appear to examine him on the date fixed even though they had applied for his production also. That being the position, we are satisfied that the petitioners' complaint that they did not have reasonable opportunity of producing evidence before the Income-Tax Officer is not well founded.
33. For the reasons mentioned above we hold that there are no merits in these writ petitions and dismiss them with costs which we assess at Rs. 200 in each case. The stay order is discharged.
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